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VNU Pondering $8.88-Billion Buyout

January 17, 2006|From Bloomberg News

VNU, owner of research company ACNielsen, is discussing an $8.88-billion bid from buyout firms including Kohlberg Kravis Roberts & Co. two months after shareholders forced the resignation of VNU's chief executive.

VNU, based in the Netherlands, said it had received an offer of 28 euros ($34) to 28.50 euros a share from a group that also includes AlpInvest Partners, Blackstone Group, Carlyle Group, Hellman & Friedman, Permira Advisers Ltd. and Thomas H. Lee Partners.

VNU shares declined 35 cents to 27.90 euros in Amsterdam.

"A bid for VNU was only a question of time, though the level of this bid seems to be a bit meager," said Maurits Heldring, an analyst at Kepler Equities in Amsterdam, who had estimated that a bid could reach 30 to 32 euros.

VNU provides companies with marketing information such as Nielsen's ratings and has more than half its sales in the U.S. It also runs trade fairs, and as a publisher it is best known for Billboard and Hollywood Reporter magazines. VNU posted sales of nearly 3.8 billion euros ($4.6 billion) and net earnings of 163 million euros (nearly $200 million) in 2004.

VNU has been vulnerable to a takeover since November, when it scrapped a $6.3-billion acquisition of IMS Health Inc. and Chief Executive Rob van den Bergh said he would quit after institutional shareholders objected to the purchase. The Haarlem, Netherlands-based company said last month that it had received "more than one approach," declining to name the bidders.

VNU said Monday that it was talking with the buyout group after having gauged the "level of interest of certain other parties."

A buyout group probably would sell the VNU Business Information division that publishes magazines and organizes trade shows, said analysts including Hans Slob of Rabobank Securities in Amsterdam.

The participation of many major buyout firms in the bid lessens the possibility of a competing offer, said stock brokerage Petercam. The group "may have to increase its bid slightly" to satisfy VNU's large institutional shareholders, including Fidelity Investments and Templeton Global Advisors Ltd., said Slob at Rabobank.

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